In April 2006 A123 Systems Inc. (A123), a Boston area lithium ion battery maker, brought a declaratory judgment action against Canadian utility Hydro-Quebec (H-Q) in federal court in Boston seeking declarations that A123 did not infringe U.S. Patent Nos. 5,910,382 (‘382 Patent) and 6,514,640 (‘640 Patent) and that the patents are invalid. H-Q is the exclusive licensee of the ‘382 and ‘640 Patents.
The ‘382 and ‘640 Patents are entitled “Cathode materials for secondary (rechargeable) lithium batteries” and relate to host materials for use as electrodes in lithium ion batteries. The patented materials provide a larger free volume for lithium ion motion that allows higher conductivity and therefore greater power densities.
In September 2006 A123 requested a stay of the Boston case pending the resolution of re-examination of the two patents in the U.S. Patent and Trademark Office (PTO). The court dismissed the case without prejudice so the parties could subsequently move to reinstate it.
Also in September 2006, H-Q and the University of Texas (UT), which owns the ‘382 and ‘640 Patents, sued A123 for infringement of the patents in federal court in Texas.
This spring, after the PTO completed its re-examination of both patents, A123 asked the court in Boston to reopen its DJ action. A123 argued that the Boston case should take precedence over the pending Texas action because it was the earlier filed case.
However, in a recent memorandum opinion (a123_memorandum.pdf) Judge Tauro of the U.S. District Court for the District of Massachusetts ruled that the Boston action could not be reinstated because A123 had failed to join the University of Texas.
Judge Tauro held that UT was a necessary party as the owner of the patents-in-suit because UT had not transferred all substantial rights in the patents to H-Q (the H-Q license contained some field of use restrictions).
Not only was UT not joined by A123, but UT could not be joined as a defendant in the Boston suit, the memorandum opinion held, because it is immune from suit. Under the Eleventh Amendment, a federal court cannot hear a suit against a state without the state’s consent.
Last month A123 appealed (a123_notice_of_appeal.pdf) Judge Tauro’s order denying the motion to reopen the case (a123_order.pdf) to the Court of Appeals for the Federal Circuit (the appellate court that hears all patent appeals).
At least prior to A123’s appeal and Judge Tauro’s order, the Cleantech Litigation blog reported that the parties were trying to settle the suit.